Thoughts on Ocasio-Cortez and Inequality

Newly elected U.S. representative Alexandria Ocasio-Cortez (New York) has a point. At a recent Austin, Texas, Democratic Party confab she launched directly into one of her rallying cries: “While America is wealthier than ever, wealth is enjoyed by fewer than ever.” When Ocasio-Cortez went on to lament “an increase in homelessness in New York City among veterans and the elderly while penthouses sit empty,” I couldn’t help but reflect on the recent purchase of a $238 million penthouse condominium overlooking Central Park. In all likelihood, it often sits unoccupied. Could it be that she had the billionaire hedge fund manager and trophy-property collector in mind?

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A 300-year lesson in bubble inflation

This guest post is courtesy of my friend Edward Chancellor and was originally published on

Just over 300 years ago, in early December 1718, a Parisian bank was nationalised by the French state. This marked the beginning of the Mississippi Bubble, which captivated France over the following couple of years. The aristocratic world of the “ancien regime” may seem impossibly distant to modern minds. Yet there are parallels between this saga and the modern age of quantitative easing, ultra-low interest rates and highly valued asset prices. As central bankers struggle to reverse their post-crisis monetary measures, the lessons imparted by the Mississippi Bubble are more relevant than ever.

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Reflections On Cash As An Option

We keynoted our first blog post on May 31, 2017 with an inauspicious title, An Enterprising Thought: Cash Is an Option. From that point, the S&P 500 continued its seemingly endless advance, finishing the year up 10.8%. In May, the two-year treasury was yielding a middling 2.2%. Ever since the Great Recession, cash has been a dirty word. As a result, money flowed into every other asset class, with equities being the best-performing over the last 10 years.

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‘Tell Me What I Wanna Hear’

Paraphrasing a refreshingly perceptive Ben Sasse, first-term senator from Nebraska: Those of us in the investment management profession know people who appear to sincerely want our advice, but then resist when we tell them something they don’t want to hear. In all candor, I must admit to being on the receiving end as well. I have rejected sound advice from time to time, and I suspect you have too.[i] Such is the result of bias. 

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Hitting the Pause Button

Just two words uttered by Fed Chairman Jerome Powell during a mid-day speech on Wednesday, November 28 sent the S&P up 2.3% by the close. The S&P 500 went on to notch an overall 2.8% gain for the week—despite lingering uncertainty surrounding the G-20 Saturday, December 1 dinner meeting between Presidents Donald Trump and Xi Jinping on the ever-mercurial Sino-American trade war. Continue reading “Hitting the Pause Button”

‘… Looks a Lot Like Elkhart, Indiana’

Our July 16, 2018, post “The Future of America’s Economy …” began with the phrase that headlined a Wall Street Journal feature on April 13. The Journal characterized Elkhart thusly: “From Bust to Boomtown: Life in a Comeback City.” The Midwestern city has risen from the ignominy of being singled out as having the nation’s highest unemployment rate of 22% in 2009 to having one of the lowest in 2018 at 2.7% in May of this year.

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Productivity Growth II: Can the U.S. Economy Stay Airborne Without It?

In our last post we alluded to the possibility that the technology-driven Fourth Industrial Revolution, for which many economists hope, will not be a panacea for enhancing productivity, in contrast to with earlier U.S. post-1870 industrial revolutions. Moreover, we addressed a complex structural factor, the slowing rate of increase in educational attainment, that insidiously depresses productivity growth. Continue reading “Productivity Growth II: Can the U.S. Economy Stay Airborne Without It?”